STP (Straight Through Processing)

STP (Straight Through Processing) brokers route client orders directly to their liquidity providers, including banks, other brokers, and ECNs, without dealing desk intervention. This provides transparent pricing and fast execution without the conflicts of interest associated with market makers who take the opposite side of client trades. STP brokers profit from spread markups or small commissions rather than from client losses.

STP is similar in principle to ECN but often with slight differences in execution mechanics. STP brokers typically have a smaller set of liquidity providers than pure ECN aggregators, and they may add a small markup to the raw quote (for example, adding 0.3 pips to every spread) instead of charging a commission. The end result is similar: spreads reflect real market pricing, the broker does not take the opposite side, and client interests align with broker revenue. Many retail brokers use hybrid STP/ECN models depending on trade size and client tier.

For example, an STP broker might receive raw EUR/USD quotes from five banks at 0.2 pip average spread, then add 0.6 pip markup and pass through a 0.8 pip spread to clients with no commission. A comparable ECN broker might pass through the 0.2 pip spread plus a $7 commission. Total cost on a standard lot is about the same. Which model works better depends on the trader's style and lot sizes.

In copy trading, STP brokers provide straight-through processing that eliminates the conflict of interest inherent in market-making models. SteadyFlowFX's recommended brokers use STP or ECN execution on the 8 traded pairs, ensuring that subscriber fills are processed fairly. Understanding STP helps subscribers evaluate broker claims about order routing and ask the right questions before depositing capital.